In its oral decision, the IUB approved no additional changes to interim rates implemented in March 2009, which increased revenues by approximately $84m. However, the IUB approved increased funding for transmission costs, as well as recovery of Sutherland generating station unit 4 cancellation costs.
The IUB accepted the proposal presented by IPL and several interveners in the case to offset a portion of the 2008 and 2009 transmission costs with funds previously set aside from the sale of the company’s transmission assets, rather than increase customer rates. In addition, the IUB approved using funds from the Regulatory Liability account from the sale of the Duane Arnold Energy Center to offset the recovery of costs associated with the cancelled Sutherland generating station unit 4 project.
The IUB also deferred the company’s proposal to implement an automatic adjustment clause to reflect future price changes assessed by the company’s transmission service provider, ITC Midwest. If approved in a subsequent rate case, the automatic transmission adjustment clause would enable IPL to recover transmission costs incurred for the benefit of customers in a timely manner. The IUB established a return on common equity of 10.5% for all non-related Emery generating station capital. The return on common equity for Emery generating station-related capital is 12.2%.
IPL anticipates that the written decision, which is expected to be issued by the IUB by January 19, 2010, will provide additional details concerning the revenue and rate design issues presented in the case. The company also expects final rates to become effective in the first quarter of 2010.
Tom Aller, president of IPL, said: “The IUB’s decision recognizes the challenges our company and customers have confronted over the past several years. Over the past five years, our company has invested more than $600m in our Iowa electric system and we expect to continue to invest in Iowa’s energy future to meet the needs of our customers.
“The IUB’s decision strikes a balance between mitigating the cost impact on customers and our commitment to providing customers with safe, reliable and environmentally responsible energy service.”
IPL expects to file an electric rate case with the IUB in March 2010, in which it plans to seek to recover costs related to infrastructure investments, including the construction of the 200MW Whispering Willow-East wind project, which is IPL’s first owned-and-operating wind farm in Iowa, and an emission reduction project at its Lansing power plant.
